This week is forming a bearish engulfing candle. In an uptrend this would be seen as a reversal. If in a trading range then I'll say the decision on direction has been made. With the 10yr and 30yr yields increasing something will have to happen to get traders to start buying bonds. If not then mortgage rates increase and homes sales are history. There goes what little "recovery" we had.

We are now below the 50% retrace and about to break below SMA(89). The Bernank needs to stop speaking. Every utterance sends the bonds lower. Or is it a subtle way of letting The Bernank know that he does not have things under control.

This is the S&P Total Market Index. It's made up of the S&P 500 and S&P Completion Index. I think of it as the S&P version of the Wilshire 5k. Last week formed a gravestone doji indicating it did not want to go lower. This week has confirmed the candle. The gravestone doji is usually a reversal candle in a downtrend. Since we were in a small range it acts as the absolute floor for the range. That's until it gets taken out.

The Bernank must really "Believe the Lie"

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comments:

The unemployment rate fell by 0.4 percentage point to 9.0 percent inJanuary, while nonfarm payroll employment changed little (+36,000),the U.S. Bureau of Labor Statistics reported today. Employment rose inmanufacturing and in retail trade but was down in construction and intransportation and warehousing. Employment in most other majorindustries changed little over the month.

Feb 3 (Reuters) - U.S. Federal Reserve Chairman Ben Bernanke on Thursday said it was "unfair" to blame U.S. monetary policy for pushing up inflationary pressures in emerging market economies.

"It's entirely unfair to attribute excess demand pressures in emerging markets to U.S. monetary policy because emerging markets have all the tools they need to address excess demand in those countries," Bernanke told an audience at the National Press Club in Washington.

Well, I see another article today about how Bernanke sees no inflation on the horizon, but I do remember Arthur Burns and "stagflation" of the Jimmy Carter era. That was when I was starting out and buying Kruggerands with whatever little extra money we had...

When Volcker came in and massively raised rates, my wife waited in line for an hour, and they finally closed the doors of our bank, said they couldn't take IN any more money....

Can commodity inflation cause stagflation...if there are no wage pressures?

A tremendous amount of Treasury shorts going into today's numbers. I imagine we will see a lot of those trades closed going into the weekend. We very much doubt that these delicious yields will last the day. Get 'em while they're hot.

With the exposure to bonds that we are building, we probably will have to get back into hedging around auctions, however. So it will be back to the bond reports you were reading last Spring.

"As Jim Rogers puts it, “God knows how high the price of agriculture is going to go, so that's where I'm putting more of my money now than in other things… I think I'm going to make more money in agriculture than I make in precious metals."

Thousands of acres of prime farmland have transformed the desert into one of the most productive farming regions in California with an annual crop production of over $1 billion. Agriculture is the largest industry in the Imperial Valley and accounts for 48% of all employment.

CV will have a fairly extensive post up tomorrow morning breaking down many of the nuances of the match-up... (most of which you won't hear from the "Merril Hoges" & "Jaws" of the world (who only know how to talk about FACTOR BACKS, & "seeing the field clearly" - ROR

I get long on pullbacks if the trend is up, and I sell rips if the trend is down.

Basically, if the 55sma is pointing up on the 1/5/15 min chart, I am going to be long, and vice versa.

I tend to trade only around pivot levels, unless I am just banking profits in the middle of a move.

For me, the cardinal sin is letting a 10 tick gain, ie: $50 per contract, turning into no gain, or worse, a loss.

Thus, I tend to bank profits alot in the middle of a move.

The more confident I get tho, the more I will trust my targets, and sit back through retracements.

It also helps to flatten your first few trades, so you have some cheese to work with to shoot for a few "runners"... a runner is any trade where you make more than 25 ticks. For the YM, dowmini, 1 tick is $5 per contract.

Don't be afraid to answer that... there's no "pat" answer... I'm more curious to hear your nominations (so I encourage everyone to chime in even if you don't think you know what you're talking about and are going purely on heresay)...

Which ESPECIALLY means that both you KAREN, and LB, who don't often talk about football, NEED to toss out an answer, ANY ANSWER, to that question...

That's for a reason... PUBLIC PERCEPTION MATTERS in a case like this (and I'm interested to know what the PUBLIC "vibe" is)... It's a science experiment (and ought to be quite revealing)...

...Yes, I know, it is 2011, and these are educated jurists. It makes you realize the dichotomy of American soldiers in among tribesmen in Afghanistan, and how bringing western ideas to some parts of the world is a real load. Yet the Scopes trial was held not so very far from BinT in the 20's...

"I'm pretty sure that cotton takes more water and fertilizer to pull off a nice crop than any other cash crop on earth"

---

Corn is the worst (but in the following sense), because "WORST" is a relative distinction...

Consider:

- fertility of soil needed- water needed- fertilizer needed (similar to #1, but different)- cost of planting & harvesting machines (think mostly diesel fuel, but also the rigs themselves and stages of refinement)- market price ("unsubsidized" - which is the only way to think about it).

Did you happen to see that link I posted yesterday afternoon about that guy's Gas trade?

Its the post from Wednesday on this link:

http://iamafuturestrader.blogspot.com/

On unleaded:

"The POIV indicator is showing a huge amount of divergence, a classic 3 lower peaks formation with three higher highs. This is exceptionally rare, I do not recall the last time I saw this. I know there is an over abundance of bullishness on the energy complex, yet this tells us the professionals are not accumulating longs at all. This is a market to watch for a sell signal for a large move down. it may well be that the next short term signal is a buy I do not know. However, this is a market speaking very loudly here and it is time to be on guard for a move that surprises the public here."

Thoughts?

I wasnt aware the energy complex was "over abundantly bullish"? Does that sound right to you?

B in T is certainly enjoying the bond sell-off, or is it the LB-baiting opportunity that is so delightful?

TLT close to 89 and to its support levels from last January and April, but what is it exactly that is driving this? Perhaps it was the 9.0% headline number for U-3, or the federal debt ceiling pantomime.

Here at Knife Catcher Capital, you can be sure we are filling our boots alongside LB. This is just too juicy to pass up, especially in the face of the market action today. Color me puzzled and full of TBT shorts.

"The best news was the decline in the unemployment rate to 9.0% from 9.4% in December. However this was partially because the participation rate declined to 64.2% - a new cycle low, and the lowest level since the early '80s."

...Our boy, CR. So yes, the Canadians rate goes up and they create 4x the number of expected jobs and more people are looking for work, while our participation rate goes down.

Of course what's USEFUL for you all to know is that the Fast Money traders tell you to buy stock in "Men's Warehouse"... because... drumroll... Most of the suits they sell are made from polyester (not cotton), so they aren't susceptible to INPUT COST shocks...

People can't have it both ways on emerging markets. If the US is firm, then Bucky rallies and EM equity unwind will result. If the US growth is weak, then DGDF, but also US equities would be overvalued and Ts would be bought.

Regarding copper, don't forget pre-1983 pennies, bitchez. Also, GB has looked awfully impressive in the playoffs against 3 really horseshit teams. But, we'll see who the league wants to win on Sunday I guess.

Here is the screen shot of the TYX for the last year or so. Notice the 4.7% area and the little peak at 4.80%. Not too many people filled their boots up there, but we did. Remember the long bond is key to mortgage rates.

But the reason I go with NICKLES is that the makeup hasn't changed since 1946... no sorting...

I sift thru pennies, but find, on the average, only about 1 in 14 "pre-1983"... It's still worthwhile if you can spare the time, but NOTHING is easier than going to the bank, handing them a $10 bill... and getting 5 $2 rolls of nickles...

You just made 40% untaxable PURE PROFIT...

And if copper prices collapse... You didn't pay spot prices for the copper or nickel...

I'm still amazed that OBAMA hasn't come out with a decree that nickles should be made of ZINC... But I guess he's too busy playing golf and filling out his NCAA brackets...

Re: GB

impressive in the playoffs against 3 really horseshit teams...

That "angle" is going to be part of my SUPER BOWL thread tomorrow... (but it will be applied to the STEELERS & Big Ben as well)...

CV-Good points all. I find about 1 in 5 pennies to be pre-83. But yeah, sifting thru them is a pain. I have been collecting nickels for a couple months now, thanks to your inspiration. If this inflation thing takes hold, I guarantee they will change the composition of nickels to zinc soon enough.

My comment about GB was also a hat tip to your boyz (the Ravens), who really should have beaten the Steelers.

Let's say we experience a less than robust global recovery..... what we at PIMCO have referred to as a New Normal...

Bill would like to fill his boots with these. You make the coupon, and if rates fell in a slowdown, the appreciation might be spectacular. As for the currency risk, they can just short the piss out of the peso and the real. Piece of cake.

Of course, you have to consider whether your AREA is frequent with big snows, what the probability is, & what type...

I end up just SHOVELING BY HAND the powdery stuff that's under 2 inches...

But a HOSS like above will handle wetter snows up to 3 feet and blow it into your friggin NEIGHBORS NEIGHBORS yard...

So it basically depends on how much you like your neighbors... How much you want to piss them off... AND/OR, if you lose all your money trading with BERNANKE BUCKS, how much meat & potatoes you could put on your table opening up a SNOW REMOVAL operation...

Though for that "last" notion, I think I'd go with a BOBCAT to save your back...

I wonder if they will try to tough it out, go along with the DGDF and the Death of Treasuries and risk rice going vertical? Or will they announce more tightening measures, increase reserve requirements, announce a rate hike, or allow the RMB to rise against BUCKY?

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This blog should not be interpreted as investment advice of any kind.The authors are NOT representing themselves CTAs or CFAs or Investment/Trading Advisor of any kind.The authors may or may not trade in the markets discussed.The authors may hold positions opposite of what may by inferred by this blog.The information contained in this blog is taken from sources the authors believes to be reliable, but it is not guaranteed by the authors as to the accuracy or completeness thereof and is presented here for information purposes only. Commodity trading involves risk and is not for everyone.

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- Andy Dufresne

"The Shawshank Redemption"

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This Blog's primary focus is on trading based upon technical analysis. It is run by "AmenRa" and "AndyT," quasi-anonymous traders who employ technical analysis to assess market conditions and trading opportunities. AmenRa utilizes 3LB techniques, Moving Averages and Fibonacci sequences. AndyT's analysis relies primarily on "Wave Theory" and Fibonacci sequences. The Comments Section is uncensored and open to the public. Please try and adhere to the "Blogger Policy."